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LECTURE 2ORGANIZATIONS AND
INFORMATION TECHNOLOGY SUPPORT
Learning Objectives
• Discuss major information systems concepts such as architecture and infrastructure.
• Describe the hierarchical structure of organizations and the corresponding information systems.
• Define various information systems and their evolution, and categorize specific systems.
• Describe the support provided to different types of employees in an organization.
• Describe how information resources are managed.
Chapter Overview
• Information Infrastructure• Information Architecture• Traditional Architectures• New Architectures
• Organizational Structure• Corresponding Information System
• Transaction Processing Systems• Management Information Systems• Support Systems
• Managers • Knowledge Workers• Clerical Staff
• Which resources are managed by whom?• What is the role of the information systems department?• Who runs the ISD and to whom does the department report?• What are the relationships between ISD and end users?
Information Systems InfrastructureandArchitecture
Organizations: Structure and Support
Evolution and Types of Information Systems
IT Support at Different Organizational Levels
Managing Information Technology in Organizations
Case : Burlington Coat Factory• The Business Problem
Burlingion is the largest retailer of coats in the United States
sells clothes, linens, luggage, jewelry, baby furniture and accessories
faces extremely strong competition wants to offer up to 60% off department store prices needs information to respond to demand needs to communicate and collaborate with both
store mangers and suppliers quickly and effectively
Case (continued…)
– a corporate computer-based communication system– networks to a main processor– transfers sales data by satellite technology– executes routine transactions on the headquarters’
computer– feeds information from the corporate databases into
spreadsheets or word processors on desktop computers for end-user computing and decision support
The Results dramatic decrease in communication problems steady increase in sales volume and profits
The Solution
Case (continued…)
• What have we learned from this case??
» several different information systems exist in one organization
» some of these systems may be completely independent, but most are interconnected
» information systems are connected by means of electronic networks
» the information system is composed of large and small computers and other hardware connected by different types of networks
» many information systems use client/server architecture
Characteristics of a networked corporate information system that are usually found in organizations
Information Systems Architecture• Physical facilities, hardware, software,
databases services, and management that support all computing resources in an organization
• Five major components of infrastructure– computer hardware– general-purpose software– networks and communication facilities– database– information management personnel
• Tells how specific computing resources are arranged, operated, and managed
Information Systems Architecture (continued …)
• Information Architecture a high-level map or plan of the information
requirements a manner in which these requirements will be satisfied a guide for current IT operations a blueprint for future IT directions meets the organization’s strategic business needs must tie together the information requirements, the
infrastructure, and the applications similar to the conceptual planning of a house
Information Systems Architecture (continued …)
• Traditional Architectures mainframe environment
» processing is done by a mainframe computer - a relatively large computer built to handle large amounts of data, thousands of user terminals, and millions of transactions
» modern versions of this architecture : personal computers (PCs) and network computing (NC)
PC environment» PCs form the hardware architecture
distributed environment» divides the processing work between two or more computers» the participating computers can be all mainframe, all PCs, or
(usually) a combination of the two
Information Systems Architecture (continued …)
• New Architectures client/server architecture
» several computers share resources and are able to communicate with many other computers
» a client - a computer such as a PC attached to the network, which is used to access shared network resources
» a server - a machine that is attached to the same network and provides clients with these services
» purpose : optimize the use of computer resources
Information Systems Architecture (continued …)
• Enterprisewide Architectures access to data, applications, services, and real-time
flows of data in different LANs or databases use client/server architecture to create a cohesive,
flexible, and powerful computing environment provide total integration of departmental and
corporate IS resources increase the availability of information and
thereby maximize the value of an organization
Information Systems Architecture (continued …)
• Internet-based Architectures based on the concepts of client/server architecture
and enterprisewide computing the Internet is the basis for a network connection
from the outside world to the company, as well as with the organization’s web site
organization’s internal private Internet (intranet) - useful for distributing information throughout the organization
The network organization:How a company uses the Internet, intranet and extranet
Head Quarter
Retail Stores
Employees
Manufacturing
Toys Inc
Corporate Intranet
EDI, VAN
Non-Company Manufacturers
Customers
Sales peoples and other
mobile employees
Distributors
Market
Non-Company Retailers
Suppliers (Purchasing)
Liquidators contractors
Toy Industry Extranet
Other Extranets
Banks and otherbusiness partners
Professional Associations, large
suppliers, competitorsCorporateExtranet
InternetPublicTravel
agency
Small customersSmall
retailersSmall vendors
Government
Organizations :Structure and IT Support
Organizations the nature of organizations determines their
activities, the information support they need, and the type of information systems they use
profit-making business versus not-for-profit organizations exist
manufacture goods versus services are delivered can be located in one place or in several places,
some are global or multinational organizations
Organizations : Structure
Organizational Structure departmental functional structure
» specialize in the delivery of a certain function» typical departments in an organization:
» Accounting» Finance» Marketing and Sales» Production or Operations Management (POM)» Human Resources Management (HRM)» Information Systems and Technology
Organizations : Structure
Hierarchical StructureHeadquarters
Division A Division B OverseasDivision
Plant C Plant D Plant E Plant F
POM Accounting Marketing Finance HRM
AdministrationServices(legal, etc.)
Organizations : IT Support
The Corresponding Information Systems Departmental Information Systems Plant Information Systems Divisional Information Systems Enterprisewide Information Systems Interorganizational Information Systems (IOS) Global Information System for an International
or Multinational Corporation
Types of Information Systems
organizations perform routine, repetitive tasks a TPS supports the monitoring, collection,
storage, processing, and dissemination of the organization’s basic business transactions
frequently, several transaction processing systems exist in one company
today’s transaction processing systems are much more sophisticated and complex
Transaction Processing Systems
Types of Information Systems (continued …)
provides periodic reports generates weekly and monthly summaries by
product, customer, or salesperson initially, MIS had an historical orientation today, MIS reports may include summary reports, for
the current period or for any number of previous periods - used for monitoring, planning, and control
functional management information systems (MIS)» access, organize, summarize, and display information for
supporting routine decision making in the functional areas» geared toward middle managers
Management Information Systems (MIS)
Types of Information Systems (continued …)
• Major Outputs of a Functional Management Information System
OUTPUT DESCRIPTIONStatistical summaries Summaries of raw data such as daily production,
and weekly and monthly usage of electricity.Exception reports Highlights of data items that are larger or
smaller than designated levels.Periodic reports Statistical summaries and exception reports
provided at scheduled, regular periods.Ad hoc reports Special, unscheduled reports provided on
demand.Comparative analysis Performance comparison to that of competitors,
past performance, or industry standards.Projections Advance estimates of trends in future sales,
cash flows, market share, etc.
Types of Information Systems (continued …)
office automation systems (OAS)» word processing systems
computer-aided design and manufacturing (CAD/CAM) decision support systems (DSS) end-user computing executive information systems (EIS) group support systems (GSS)
Support Systems
Intelligent Systems expert systems (ES) artificial neural network (ANN)
Types of Information Systems (continued …)
various computerized systems are being integrated to increase their functionalities
one popular form of integrated system is enterprise resources planning (ERP)
ERP plans and manages all of an organization’s resources and their use, including contacts with business partners
Integrating Systems
The EvolutionComputer Based Information Systems
1940 Scientific, military applications
1950 Routine business applications, TPS
1960 MIS, office automation
1980Client/server executive information system,
PC’s, AI, Groupware
1970 DSS, LANs
1990Integration, intelligent systems
the Web, intranets, extranets, ERP software
2000 Internet, Electronic commerce, Smart systems
IT Support at Different Organizational Levels
Information Infrastructure and TPS
The information systems support of people in organizations
Office Automation and Communication Systems Clerical Staff
Operation Systems Line Managers, Operators
Managerial Systems Middle Managers
Staff Support Knowledge Workers, Professionals
StrategicSystems
Top Managers
Knowledge Workers• People who create information and knowledge and integrate
it into the business• Engineers, financial and marketing analysts, production
planners, lawyers, and accountants• Responsible for finding or developing new knowledge for the
organization and integrating it with existing knowledge• Act as advisors and consultants to the members of the
organization• Act as change agents by introducing new procedures,
technologies, or processes• 60 to 80 percent of all workers are knowledge workers• Supported by a large variety of information systems from
Internet search engines to expert systems, to computer-aided design, and by knowledge bases
Clerical Staff
• Support managers at all levels• Data workers - use, manipulate, or disseminate
information– bookkeepers, secretaries who work with word
processors, electronic file clerks, and insurance claim processors
• Supported by office automation and groupware, including document management, workflow, e-mail, and other personal productivity software
IT Support at Different Organizational Levels : A Summary
SystemEmployees Supported
Office automation Office workersCommunication All employeesGroup support system
People working in groups
Decision support system
Decision makers, managers
Executive information Executives, top managers
Intelligent systems Knowledge workers
TPS Line managers and employees
MIS Middle management
• IT resources are scattered throughout the organization• Information systems have enormous strategic value• Some IT resources change frequently. It may be rather difficult
to manage IT resources• It is essential to manage information systems properly• The responsibility for the management of information
resources is divided between a usually centralized information systems department (ISD) and the end users
• Which resources are managed by whom?– Generally speaking, ISD is responsible for corporate-level and shared
resources, and the end users are responsible for departmental resources
Managing IT Resources
• What is the role of the information systems department?– Traditional major IS functions:• Managing systems development and systems project
management• Managing computer operations, including the computer
center• Staffing, training, and developing IS skills• Providing technical services
Managing IT Resources(continued …)
Managing IT Resources (continued …)
• What is the role of the information systems department? (continued)– New (additional) major IS functions:
• Initiating and designing specific strategic information systems• Infrastructure planning, development, and control• Incorporating the Internet and electronic commerce into the business• Managing system integration including the Internet, intranets, and
extranets• Educating the non-IS managers about IT• Educating the IS staff about the business• Supporting end-user computing• Partnering with the executive level that runs the business• Actively participating in business processes reengineering• Proactively using business and technical knowledge to the line with
innovative ideas about IT• Creating business alliances with vendors and IS departments in other
organizations
• Key MIS issues in two recent time periods
Managing Information Technology
Key Issues, 1994/1995 Key Issues, 19971. Building a responsive IT infrastructure
1. Improving productivity
2. Facilitating and managing business process redesign
2. Reducing costs
3. Developing and managing distributed systems
3. Improving decisionmaking
4. Developing and implementingan information architecture
4. Enhancing customer relationships
5. Planning and managing communication networks
5. Developing newstrategic applications
• Who Runs the ISD and to whom does ISD Report?
Managing Information Technology (continued …)
run by MIS Director, Manager of Computing Services, Manager of Information Technology, or Chief Information Officer (CIO)
reports to » Chief Executive officer
» Functional Vice President
» Senior vice president
» Chief knowledge officer (CKO) - the director assigned to capture and make effective use of IT knowledge for an organization
The executive committee provides the top-level oversight for the organization’s information resources. It guides the IS steering committee, which is usually chaired by the CIO.
• What are the relationships between the ISD and end users?
Managing Information Technology (continued …)
A steering committee that represents all end users and the ISD. This committee sets IT policies, decides on priorities, and coordinates IS projects.
Joint ISD/end-user project teams for planning, budgeting, applications development, and maintenance
ISD representation on the top corporate executive committee Service agreements that define computing responsibilities and
provide a framework for services rendered by the ISD to end users Technical and administrative support (including training) for end
users A conflict resolution unit established by the ISD to handle end-user
complaints quickly and resolve conflicts as soon as possible An information center that acts as help center to end users regarding
purchase, operations, and maintenance of hardware and software
What’s in IT for Me?
• For Accounting– Many of the transactions handled in a TPS are data that
the accounting department records and tracks• For Finance– Financial departments often use specialized DSS for
forecasting and portfolio management• For Marketing– Marketing uses such IT-related concepts as customer
databases, marketing decision making, sales automation, and customer relationship management (CRM)
What’s in IT for Me? (continued …)
• For Production/Operations Management– Organizations are competing on price, quality, time (speed), and
customer service which are enhanced and supported by IT• For Human Resources Management– Intranets help to disseminate relevant information throughout
the organization. Internets are used for recruiting• For MIS– IS management function continues to grow in strategic value
• For Non-Business– In all organizations, IT provides essential support to all functional
areas`
INFORMATION SYSTEMINFORMATION SYSTEMINFORMATION SYSTEMINFORMATION SYSTEM
INFORMATIOINFORMATION N
SYSTEMSYSTEM
BUSINESS BUSINESS
CHALLENGECHALLENGE
BUSINESS BUSINESS
SOLUTIONSSOLUTIONS
MANAGEMENTMANAGEMENT
INFORMATIONINFORMATION
TECHNOLOGYTECHNOLOGY
ORGANIZATIONORGANIZATION
MANAGING CHANGEMANAGING CHANGE
FITTING TECHNOLOGY TO OFITTING TECHNOLOGY TO ORGANIZATIONRGANIZATION
LIMITS OF TECHNOLOGYLIMITS OF TECHNOLOGY
ORGANIZATIONS & INFORMATION TECHNOLOGY
MEDIATING FACTORS: EnvironmeMEDIATING FACTORS: Environment Culture nt Culture Structure Standa Structure Standard Procedures Politics rd Procedures Politics Management Decisions Ch Management Decisions Chanceance
ORGANIZATIONSORGANIZATIONS INFORMATIOINFORMATION TECHNOLON TECHNOLOGYGY
MICROECONOMIC DEFINITION OF ORGANIZATION
INPUT FROM ENVIRONMENT
OUTPUT TO ENVIRONMENT
PRODUCTIONPROCESS
FEEDBACK
ORGANIZATIONORGANIZATION
BEHAVIORAL VIEW OF ORGANIZATIONS
STRUCTURE:HierarchyDivision of labor Rules, Procedures
PROCESS:Rights/Obligations Privileges/ResponsibilitiesValues
NormsPeople
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NV
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NM
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STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS
• CLEAR DIVISION OF LABOR• HIERARCHY• EXPLICIT RULES & PROCEDURES• IMPARTIAL JUDGMENTS• TECHNICAL QUALIFICATIONS• MAXIMUM ORGANIZATIONAL EFFICIENCY
*
ORGANIZATIONAL STRUCTURES
• ENTREPRENEURIAL: Start up business• MACHINE BUREAUCRACY: Mid-sized manufacturing f
irm• DIVISIONALIZED BUREAUCRACY: Fortune 500• PROFESSIONAL BUREAUCRACY: Law firms, hospitals• ADHOCRACY: Consulting firm
*
SALIENT FEATURES OF ORGANIZATIONS
COMMON FEATURES:• FORMAL STRUCTURE• STANDARD OPERATING PROCEDURES• POLITICS• CULTURE
*
3.8
ORGANIZATION & ITS ENVIRONMENT
THE FIRM
INFORMATION SYSTEMS
ORGANIZATION & ITS ENVIRONMENT
THE FIRM
INFORMATION SYSTEMS
THE ENVIRONMENT:THE ENVIRONMENT:
RESOURCES & CONSTRAINTS
GOVERNMENTS
COMPETITORS
FINANCIAL INSTITUTIONS
CULTURE
KNOWLEDGE
TECHNOLOGY
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
• INDIVIDUAL• GROUP• DEPARTMENT• ORGANIZATION• INTERORGANIZATION• ORGANIZATIONAL NETWORK
*
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
INDIVIDUAL:• ACTIVITY: Job, task• SUPPORT: Client database, DSSGROUP:• ACTIVITY: Project• SUPPORT: Product scheduling, access to TPS, exte
rnal sources, dynamic info needs, group DSS*
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
DEPARTMENT:• ACTIVITY: Major function • SUPPORT: Accounts payable; payroll; marketing;
MIS; TPSDIVISION:• ACTIVITY: Major product, service• SUPPORT: Systems to support functions; MIS; TPS
; on-line*
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
ORGANIZATION:• ACTIVITY: Multiple products, services, goals• SUPPORT: Integrated on-line, interactive finan
cial & planning systems; MIS; ESS*
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
INTERORGANIZATION:• ACTIVITY: Alliance; competition; exchange; co
ntact• SUPPORT: Communication systems; intelligenc
e, observation, monitoring systems*
ORGANIZATIONAL LEVELS & SUPPORT SYSTEMS
ORGANIZATIONAL NETWORK:• ACTIVITY: Sector of economy; related product
s, services; interdependencies• SUPPORT: Informal communication systems; i
ndustry / sector-level formal reporting systems
*
WORK GROUPS, PROBLEMS, SUPPORT
TYPES:HIERARCHICALINTERDEPARTMENTAL COMMITTEESPROJECT TEAMSCOMMITTEESTASK FORCESPEER GROUPS / SOCIAL NETWORKS
*
WORK GROUPS, PROBLEMS, SUPPORT
PROBLEMS:MAKING ARRANGEMENTSATTENDING MEETINGSLONG AGENDASCOST OF MEETINGSBETWEEN-MEETING ACTIVITIES
*
WORK GROUPS, PROBLEMS, SUPPORT
SUPPORT:HIERARCHICAL: Video conferencing; e-mail INTERDEPARTMENTAL COMMITTEES: Electronic
messaging*
WORK GROUPS, PROBLEMS, SUPPORT
SUPPORT:PROJECT TEAMS: Scheduling software; Meeting
support tools; Documents; IntranetCOMMITTEES: e-bulletin boards; Video conferen
cing; e-mail; Computer conferencing*
WORK GROUPS, PROBLEMS, SUPPORT
SUPPORT:TASK FORCES: Graphics display; Info utility; Docu
ments; Meeting support toolsPEAR GROUPS / SOCIAL NETWORKS: Telephone;
e-mail; Correspondence*
THE COMPUTER PACKAGE
• ORGANIZATION: Senior Management; Major end users
• INFORMATION SYSTEMS DEPARTMENT– Technology: Hardware; Software– Information Systems Specialists
*
THE COMPUTER PACKAGE
INFORMATION SPECIALISTS: • Managers• Systems analysts• Systems designers• Systems programmers• Applications programmers• Maintenance programmers• Database administrator
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WHAT SOME SPECIALISTS DO
• PROGRAMMERS: Write software• SYSTEMS ANALYSTS: Translate business proble
ms into solutions• IS MANAGERS: Department leaders• END USERS: Department reps for whom applic
ations are developed
SYSTEM DEVELOPMENT PROCESS
EXTERNALEXTERNAL Uncertainties UncertaintiesOpportunitiesOpportunities
INTERNALINTERNALValuesValues NormsNormsInterestsInterests
SYSTEM DEVELOPMENTSYSTEM DEVELOPMENT Adoption Adoption Utilization Utilization Management Management
HOW INFO SYSTEMS AFFECT ORGANIZATIONS
• MICROECONOMIC THEORY: Info technology is a factor of production, like capital & labor
• TRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externally
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VP VP VP
CEO
HOW INFO SYSTEMS AFFECT ORGANIZATIONS
• AGENCY THEORY: Firm is nexus of contracts among agents who make decisions; IS shrink number of agents & reduce cost
• BEHAVIORAL THEORIES: Concepts from Sociology, Psychology, Political Science; Organizations & Information Technology mutually influence each other
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VP VP VP
CEO
HOW INFO SYSTEMS AFFECT ORGANIZATIONS
• DECISION & CONTROL THEORY: Decisions are made under conditions of risk & uncertainty; centralization & hierarchy reduce uncertainty
• SOCIOLOGICAL THEORY: Bureaucracy, SOPs help stabilize organizations, but slow ability to change
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VP VP VP
CEO
HOW INFO SYSTEMS AFFECT ORGANIZATIONS
• POSTINDUSTRIAL THEORY: Flatter organizations; dominated by knowledge workers; decentralized decision making
• CULTURAL THEORY: Info technology must fit organization’s culture to be accepted
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VP VP VP
CEO
HOW INFO SYSTEMS AFFECT ORGANIZATIONS
• POLITICAL THEORY: Info systems are outcome of political competition for policies, procedures, resources
*
VP VP VP
CEO
IMPLEMENTING CHANGE
Source: Leavitt, Handbook of Organization (1965)
TASKTASK
PEOPLEPEOPLETECHNOLOGYTECHNOLOGY
STRUCTURESTRUCTURE
RESISTANCERESISTANCE
MUTUALMUTUALADJUSTMENTADJUSTMENT
HOW WEB AFFECTS ORGANIZATIONS
• MORE INFO, ANYWHERE, ANYTIME• MORE SCOPE, DEPTH, RANGE OF KNOWLEDGE
: Global encyclopedia• LOWERS COST, RAISES QUALITY OF INFO DIST
RIBUTION: Enhances attention span of vendors, customers, employees
*
THANKYOU
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